Transcript anothertruth

Another Inconvenient Truth
An Introduction to Peak Oil
October 2007
TheOilDrum.com
The US was once the leader in
world oil production
But US oil production began to
decline in 1970
No one told the public about
the decline
• US oil decline gave rise to the oil problems in
the 1970s - OPEC, embargo
• Decline continues, year after year
• Decline occurred even with improving
technology
• We began to import more oil and moved to a
“service” economy
• Truth was too embarrassing to tell
One by one, other sites have
begun to decline also
Soon, world oil production will
begin to decline
• Date not yet certain
• Association for the Study of Peak OilUSA says “Before 2015”
• Case Western Reserve survey of oil
experts says “highly likely” by 2010
• Several experts say 2005 or 2006
• Data suggests peak may be past
Peak may have occurred about
time of Hurricane Katrina (2005)
Where is oil used?
• Transportation - cars, buses, trucks
• Food - planting and harvesting,
processing, refrigeration, transportation
• Raw materials - asphalt, building
materials, clothing, pharmaceuticals
• Energy source - manufacturing
Scarcity and Fossil Fuel Cost
Offshore
Onshore
Graph of Oil Production
Source: Colin Campbell of the Association for the Study of Peak Oil and Gas (ASPO)
Newsletter as in Wikapedia http://en.wikipedia.org/wiki/Peak_oil
Global Conventional Oil Production May Peak Soon
US has as has Texas
Rough estimates of future world
oil production - if peak is now
Sources of data for previous
graph
• Historical: US Energy Information
Administration
• Symmetric: Assumes future will be
mirror image of past
• Analyst average: Average of close-date
projections by Ace, Bakhtiari, and
Robelius
Future US oil supply will depend
on level of imports
Level of future US oil imports is
very uncertain
• Imports likely to decline faster than
world oil supply
– Exporters supply themselves first
– Hoarding; civil unrest
• US may be unable to purchase oil
– Balance of payments issues
– Will exporters take more IOUs?
Oil facts:
U.S.
Imports
ASIDE: US ‘Dependence’on Mid East?
~ 60% US oil Imported
U.S. gets all Western Hemisphere’s oil
From Mideast: 2000: 21%,
2005: 17% (10-12% of total demand)
Hence, U.S. fractional “dependence” very low
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means
.to
pump…
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With less oil, real GDP is likely to
decline
Why weren’t we told?
• We weren’t told when US production
peaked.
• Can we expect to be warned before
world production peaks?
• Declining economies are embarrassing.
Will technology save the day?
• Technology didn’t prevent the decline in
US oil production.
• Technology didn’t prevent the decline in
North Sea oil production.
• Should we expect it to prevent a decline
in world oil production?
Is there an easy solution?
• No, not really.
• Conservation is a partial solution.
• Alternative fuels (solar, wind, biofuels,
geothermal) are likely to provide some help.
• New technology like battery-operated cars is
likely to be too little, too late.
• We may need to unwind globalization; go
back to simpler life styles, technologies that
worked before.
7.0E+13
6.0E+13
kW Hour
5.0E+13
4.0E+13
3.0E+13
Oil
Gas
Coal
Nuclear
Renewable
2.0E+13
1.0E+13
0.0E+00
2005 2015 2025 2035 2045 2055 2065 2075 2085 2095
Cumulative Investments (billion
$US)
Why Iraq (Iran)? Much pressure to develop fields:
N.B.
2030
2030
2030
2020
2020
2020
Very similar
graphs were
made by:
Council on
Foreign
Affairs
pre-invasion
commission;
(included
lateroccupation
official Jas.
Garner, …)
2010
2010
2010
Production (million barrels/day)
Slow production expansion
Restoration of production
Rapid production expansion
capacity
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IEA Reference Scenario
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(Source: IEA Energy Investment Conf. late
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Energy/Oil
Basic
Facts:
Persian-Gulf states’ importance
Supply
U.S. & Russia
#2 & #3 producers
-- unsustainable –
Gulf States’
production%
will grow
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What are
Iraq/ Iran’s
importance
to global system?
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